Arbeitspapier
Labor-share dynamics: The role of import competition
Does increasing product-market competition from foreign firms affect domestic labor shares? By combining detailed Swedish firm-level data with an instrumental variable design, I show that an increase in import penetration caused by increased global competition results in a decrease in domestic industry-level labor shares. The decrease comes both from a reallocation of firms' market shares and a fall in labor shares at the firm level. The analysis shows that the negative effect of competition on firm-level labor shares is driven by an increase in productivity that is not met by a corresponding increase in compensation to labor. I use these findings to calibrate a heterogeneous-firm model where domestic and foreign firms compete on the domestic product market. The calibrated model predicts that an increase in foreign competition corresponding to a one standard deviation increase in import penetration results in a 1.12 percentage point increase in welfare.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 2021:13
- Klassifikation
-
Wirtschaft
Aggregate Factor Income Distribution
Production, Pricing, and Market Structure; Size Distribution of Firms
Trade: General
- Thema
-
Labor Share
Competition
International Trade
Welfare
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Paulie, Charlotte
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute for Evaluation of Labour Market and Education Policy (IFAU)
- (wo)
-
Uppsala
- (wann)
-
2021
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Paulie, Charlotte
- Institute for Evaluation of Labour Market and Education Policy (IFAU)
Entstanden
- 2021
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